Barrick Gold Corporation 2008 Annual Report The gold industry’s only ‘A’ rated balance sheet. The largest production, reserves and market capitalization. Three advanced projects that will bring on lower cost production in each of the next three years. An unwavering commitment to safe and responsible mining. Barrick is the gold industry leader. 2 Letter to Shareholders 5 Message from the President and CEO 6 Financial Strength 9 Gold Leverage 12 Operations 15 Reserves and Resources Summary 17 Advanced Projects 20 Responsible Mining 24 Management’s Discussion and Analysis 82 Financial Statements 86 Notes to Consolidated Financial Statements 141 Mineral Reserves and Resources 149 Corporate Governance and Committees of the Board 150 Shareholder Information 152 Board of Directors and Senior Officers FINANCIAL HIGHLIGHTS P&P RESERVES1 M&I RESOURCES1 INFERRED RESOURCES1 (Ounces millions) (Ounces millions) (Ounces millions) Up 13.9 M oz Up 14.4 M oz Up 2.8 M oz 138.5 65.0 124.6 34.8 50.6 31.9 Grew industry’s Grew M&I Grew inferred largest gold resources 29% resources 9% reserves 11% 2007 2008 2007 2008 2007 2008 OPERATING CASH FLOW ADJUSTED NET INCOME2 DIVIDENDS (US dollars billions) (US dollars billions) (US dollars per share) Up 27% Up 60% Up 33% 2.21 1.66 0.40 1.73 0.30 Record 1.04 Strong increase Increased cash flow in adjusted returns to net income shareholders 2007 2008 2007 2008 2007 2008 Barrick posted record cash flow in 2008 from the industry’s largest production. (in millions of US dollars, except per share data) (US GAAP basis) 2008 2007 2006 Sales $ 7,913 $ 6,332 $ 5,630 Net income 785 1,119 1,506 per share 0.90 1.29 1.79 Adjusted net income2 1,661 1,036 1,230 per share 1.90 1.19 1.46 Operating cash flow 2,206 1,732 2,122 Cash and equivalents 1,437 2,207 3,043 Dividends per share 0.40 0.30 0.22 Operating Highlights Gold production (000s oz) 7,657 8,060 8,643 Average realized gold price per ounce2 $ 870 $ 619 $ 543 Total cash costs per ounce2 $ 443 $ 345 $ 280 Total gold cash costs per ounce – full credit basis for non-gold sales2 $ 337 $ 228 $ 201 Copper production (M lbs) 370 402 367 Average realized copper price per pound2 $3.39 $ 3.22 $ 3.06 Total cash costs per pound2 $1.19 $ 0.82 $ 0.78 1 See page 15 of the 2008 Annual Review. 2 Non-GAAP measure – see pages 72–76 of the 2008 Financial Report. Only ‘A’ rated balance sheet $1.4 billion in cash $2.2 billion in operating cash flow $1.5 billion undrawn line of credit 7.7 million ounces of production Industry’s largest reserves of 138.5 million ounces Largest market capitalization 3 new projects in 3 years ~2.0 million ounces Lower cost production Dow Jones Sustainability Index (World) Dow Jones Sustainability Index (North America) Sustainable economic development Zero incident safety culture Financial In a period of economic uncertainty, Barrick is in a strong financial Strength position to continue executing its vision and strategy. Gold With the industry’s largest production and reserves, Barrick Leverage has exceptional leverage to higher gold prices. Advanced Our three advanced projects collectively represent nearly Projects two million ounces of lower cost average annual production when at full capacity. Responsible Barrick is committed to sustainable economic development, Mining environmental stewardship and a culture of safety. Letter to Shareholders Thesepastfewmonths,for thefirsttimesince other way – and that Barrick and its shareholders foundingBarrick25yearsago,Ihavebeenflooded will clearly reap the rewards of this trend. Why am with calls from friends, business associates, I bullish on gold? For the same reasons that I am acquaintances, and institutions eager to buy actual, gloomy about the state of our global economy. As physical gold. That’s how bad things are out there. the financial crisis and its associated ills intensify, AndthatiswhyIhavestruggledtofindtheright tone more and more investors will retreat to the relative for this year’s letter. safety of gold. On the one hand, I continue to be pessimistic With the unprecedented scale of economic about the global economy. The world is in a state of stimulus plans, it would be a historical anomaly if crisis, and it is not at all clear how or when we will we did not see the re-emergence of inflation, and emerge from the raging storm. a devaluation of many of the world’s major paper On the other hand, if ever there was a time to be currencies, including the U.S. dollar. And we all in the gold business, this is it. While just about every know of the inverse correlation between the U.S. other asset – from real estate to oil, from the British dollar and the gold price. pound to the S&P 500 – has collapsed in value, the This is not all that gold has in its favor right now: price of gold hovers around all-time highs. Gold has the metal’s underlying fundamentals have also never emerged as a true safe haven, a hedge against been more compelling. For even while demand for uncertainty and instability. Interest in buying gold gold remains strong, the production of gold remains has been strong even as the U.S. dollar has been firm. limited. Opening a gold mine is not as easy as it once As many of you know, I have never been a gold- was, not by a long shot. bug. On the contrary, one of Barrick’s founding If gold is so attractive right now, why do I principles was to create a gold mining company that continue to believe that Barrick shares are a better, did not depend only on the rising price of gold – to more prudent investment than gold bars? Because create an enduring company whose fiscal prudence I’m not simply interested in what will happen this and outstanding management would reward its month or even this year. My years in this business shareholders regardless of whether gold was trading have taught me that what matters most is to have at $400 per ounce or at $800 per ounce. I am happy perspective, and to build for the long haul. Consider: to report that we have created just that company. while a $1,000 investment in Barrick at our founding I am still not a gold-bug. Yet I believe firmly that in 1983 would today be worth $39,000, that same bullion prices have a much better chance to move investment in gold bullion would today be worth considerably higher over the next few years than the only around $2,000. 2 Letter to Shareholders Barrick Annual Review 2008 Clearly I am more optimistic about Barrick’s been an integral part of this company since the day future than ever. We are the industry’s leader, but we put the name “Barrick” down on paper. As CEO more than that, we have positioned Barrick to offer since 2003, he has played a critical role at Barrick, investors leverage to the gold price. We have the overseeing our 2006 acquisition of Placer Dome and industry’s largest reserves and production. Most many other key initiatives that built Barrick into importantly, we continue to have the only ‘A’ rated what it is today. While Greg stepped down in March balance sheet in our industry. 2008 because of health reasons, he continues to work Barrick ended 2008 with $1.4 billion in cash, a closely with us in his new position as Executive Vice record $2.2 billion in cash flow, and an undrawn Chairman. For that, we are grateful. line of credit of $1.5 billion. As a further testament Our new president and chief executive officer, to Barrick’s financial credibility, I’m able to report Aaron Regent, officially joined Barrick on January 16, that we successfully issued $1.25 billion in debt 2009. After many months spent looking for the right securities in late 2008. Our robust balance sheet person to lead Barrick, our search committee agreed gives us the freedom to look ahead and to execute unanimously that Aaron has all the characteristics our long-term strategic plans. In today’s corporate and strengths we could hope for in a CEO. He has climate, that is a luxury that very few other an unmatched reputation for thinking creatively, companies can afford. executing strategy, and delivering results to Accordingly, Barrick is forging ahead, bringing shareholders. He is experienced in both the worlds of on line new projects where gold will be produced at mining and finance. And, especially gratifying to me, significantly lower costs than our current operating he fits easily into Barrick’s fast-moving, collegial and mines. These new projects include: our Cortez Hills entrepreneurial culture. project in Nevada, where regulatory approval has That corporate culture demands, above all, now allowed construction to begin; our Pueblo Viejo that we perform for our shareholders – which we property in the Dominican Republic, which has also intend to do. advanced to the construction stage; and our Buzwagi project in Tanzania, where gold will begin to be poured by mid-year. Together, these three projects are expected to contribute almost two million ounces of gold a year to Barrick’s total production. For all this good news, I am deeply saddened that this year also marked the resignation of Greg Wilkins Peter Munk as our president and chief executive officer. Greg has Founder and Chairman Barrick Annual Review 2008 Letter to Shareholders 3 1983 – 2008: A QUARTER CENTURY OF BARRICK GOLD 1983 1985 1986 1987 Vision – to become the Enters top 10 producers Goldstrike acquired Listed on the New York world’s best gold company in North America for $62 million Stock Exchange 116 ABX thousand ounces NYSE 1992 1994 1995 1996 1.0 M oz produced Strategy – Lac Minerals Becomes Barrick Meikle mine opens; at Goldstrike acquisition Gold Corporation Barrick acquires Arequipa 1998 1999 2001 2002 Record earnings of Bulyanhulu acquired Barrick merges with Lagunas Norte discovery $300 million; 3.2 M oz via Sutton purchase Homestake Mining produced 3.2 million ounces 2005 2006 2007 2008 Execution – 3 new Placer Dome Added to Dow Jones Results – gold mines open acquisition closes Sustainability Index industry leader – (North America) 7.7 M oz produced 7.7 million ounces Message from Aaron Regent President and CEO Since assuming the role of CEO in January, I have While growth is an important driver, profitable had the chance to meet many people within the growth is what matters most.